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Commentary: There's an upside to the Trump tariffs

Yahoo

6 minutes ago

Yahoo

Commentary: There's an upside to the Trump tariffs

Many CEOs have been scrambling this year to rewire supply chains and minimize the impact of President Trump's new tariffs. The import taxes have dented profits at dozens of big companies and led many economists to downgrade their forecasts for growth and hiring. The tariffs aren't all bad, however. Trump and his aides have been crowing about the new revenue the tax hikes are bringing in, and there's now an important third-party endorsement of that view. Rating agency S&P Global updated its credit assessment of the United States on Aug. 18, citing new tariff revenue as a modest positive in America's otherwise shaky fiscal situation. S&P called new tariff revenue "robust" and said it has the potential to offset other actions likely to worsen the US debt profile. If that helps stabilize US debt relative to the size of the economy at current levels, the US economy might be fine. The US debt picture is still ugly. Total federal debt recently surpassed $37 trillion. The portion traded by investors in financial markets is equal to about 100% of GDP, an unprecedented level outside of wartime. The tax-cut legislation Trump signed into law in early July will add at least $4 trillion more to the national debt during the next decade. At current levels, Trump's tariffs could bring in nearly $300 billion per year in new revenue. That would cut the expected annual deficit in 2025 from $1.9 trillion to $1.6 trillion. That's not a huge improvement, but Trump's tariff revenue is still the most substantial new source of federal revenue in years. Read more: What Trump's tariffs mean for the economy and your wallet It's also notable that one of the rating agencies has anything positive to say about America's finances, which have been steadily deteriorating since 2001, the last time there was a budget surplus. S&P shocked financial markets in 2011 when it downgraded US creditworthiness from AAA to AA+, the first such downgrade ever. Two other rating agencies, Moody's and Fitch, have also knocked the US out of the top tier since then. S&P rates 11 countries higher than the US, including Canada, Australia, Singapore, and eight European nations. The US still has unique advantages. S&P notes that the US economy has grown far faster than other advanced economies since the COVID downturn in 2020. Reasons for US outperformance include "strong civic society, political respect for property rights and the rule of law, and success in promoting innovation and new technology." The primacy of the US dollar, which accounts for about 60% of the world's government reserves, is a priceless edge. Without saying so outright, the S&P analysis includes some stern warnings for Trump. The agency repeatedly cited the Federal Reserve as a unique enabler of stability and prosperity and noted that any interference with that could have dire consequences. America's AA+ rating "could come under pressure if political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence of the Federal Reserve," S&P said. The agency has cited US political dysfunction as a concern before, but the heavy emphasis on Federal Reserve independence is new. Read more: How much control does the president have over the Fed and interest rates?That seems an obvious reference to Trump's efforts to browbeat the Fed into sharply cutting interest rates and otherwise gain more control over Fed policymaking. Unlike any other president, Trump has repeatedly berated Fed Chair Jerome Powell and threatened to fire him. Powell and the Fed have so far resisted Trump's pressure campaign, but that could change over time as Powell and other Fed policymakers serve out their terms and Trump nominates replacements. S&P also referred to the importance of "transparent and timely statistical information" to the dynamism of the US economy. That sounds like an oblique reference to Trump's recent firing of the economist overseeing the jobs report after it showed a startling slowdown in hiring. Trump falsely claimed the data was "rigged" and nominated a partisan replacement who suggested suspending the monthly jobs report. S&P is indicating it would view such a move as credit-negative. The Trump tariffs remain a risk in themselves. S&P foresees relatively weak GDP growth of 1.7% this year and 1.6% in 2026, down from 2.8% in 2024. That slowdown comes in large part from the added cost and uncertainty of Trump's tariffs, plus a slowdown in labor force growth due to Trump's strict immigration policies. Most forecasters agree that Trump's policies will bring slower growth, with fewer jobs and perhaps higher inflation. The blessing for Trump and for most Americans is that the US economy is a dynamo that's hard to repress, even with questionable policies. Trump and most other presidents credit themselves for a resilient economy that would do just fine without them, and maybe perform even better. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices.

Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal

Yahoo

36 minutes ago

Yahoo

Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal

The talk show host's Merit Street Media is simultaneously suing Trinity Broadcasting while facing off in bankruptcy court Trinity Broadcasting is countersuing Dr. Phil McGraw's Merit Street Media in bankruptcy court for fraud and breach of contract. In a complaint filed Tuesday in U.S. Bankruptcy Court for the Northern District of Texas and obtained by TheWrap, Trinity Broadcasting, McGraw's distribution parter, alleges that he defrauded the Christian television network through a $500 million, 10-year distribution agreement—claiming he failed to deliver even a single episode of his new talk show. More from TheWrap How to Watch 'South Park' Season 27: When Is Episode 3 Streaming? Francis Ford Coppola's 'Megalopolis' Reborn: See Pages From the New Graphic Novel | Exclusive 'Sekiro: Shadows Die Twice' Video Game Gets Anime Adaptation at Crunchyroll Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal On the other hand, Merit Street (which is currently in bankruptcy court) argues that Trinity Broadcasting failed to uphold its end of their joint venture, primarily by not securing national distribution. Instead, the network abused 'its power as a controlling shareholder,' the company claims, by pressuring Merit Street into costly third-party distribution deals rather than using Trinity's existing network of local TV stations. While Merit's suit alleges 'shoddy production services' from TBN, the 'most egregious' issue, it says, is that Merit Street programs could not be seen nationwide due to 'withholding distribution payments despite repeatedlyacknowledging those distribution payments were 100% TBN's sole responsibility.' 'Simply put, as a result of TBN's conduct, Merit Street has nowhere to send its broadcast signal and nowhere to air its programming,' Merit's suit alleges. Trinity tells a different story. In its countersuit, the broadcaster says McGraw himself approached the company in 2022 after seeking a replacement for CBS as both production and distribution partner for his talk show. Trinity contends McGraw made key assurances about the show's financial health and continued popularity that ultimately proved misleading. The lawsuit alleges these assurances included McGraw's proposed cost-cutting measures: a 40 percent reduction in the show's $68 million annual production budget by relocating all operations to Texas from California and eliminating unionized staff. He also asserted ownership of the series, claiming CBS had already sold out its advertising inventory, and promised to deliver new, expanded 90-minute episodes. Through his production company, Peteski, McGraw allegedly told Trinity Broadcasting that it had to sign a deal with Peteski and pay him $20 million upfront as a show of good faith—or he would instead accept CBS' competing offer of $75 million per year. Anything less, he warned, would be a 'deal killer,' according to the lawsuit. According to the complaint, under a purported $500 million, ten-year agreement, Trinity Broadcasting was to provide production and distribution services to Merit Street, while Peteski would supply new content, including 160 episodes. 'TBN is confident that the truth will set it free, and result in Peteski and McGraw being held accountable for their reprehensible conduct,' the lawsuit reads. The partnership reportedly deteriorated last year when McGraw allegedly failed to deliver the promised viewership, product integrations, and advertising revenue to Trinity Broadcasting. The network claims it had spent over $100 million by the end of June (some of which was recorded as loans to Merit Street). The lawsuit states that amount continued to climb as Trinity Broadcasting funneled up to $13 million per month into production, even though McGraw had yet to produce a single episode. When Trinity Broadcasting stopped its payments, McGraw accused the network of breaching the contract and subsequently filed for bankruptcy. Trinity Broadcasting asserts multiple claims of fraud and breach of contract, seeking a court determination of both companies' rights and obligations under the agreement. It also asks the court to rule that McGraw had agreed to transfer his library of Dr. Phil episodes. McGraw's lawsuit requests Merit Street be awarded damages on all counts, legal fees, and 'such other and further relief as the Court may deem just and proper,' though no specific amount for such was listed. McGraw's media venture was founded just last year, after his 'Dr. Phil' TV show ended with the 2022-23 season. Merit Street Media did not immediately return TheWrap's request for comment. The post Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal appeared first on TheWrap.

Yahoo

36 minutes ago

Yahoo

Commentary: There's an upside to the Trump tariffs

Many CEOs have been scrambling this year to rewire supply chains and minimize the impact of President Trump's new tariffs. The import taxes have dented profits at dozens of big companies and led many economists to downgrade their forecasts for growth and hiring. The tariffs aren't all bad, however. Trump and his aides have been crowing about the new revenue the tax hikes are bringing in, and there's now an important third-party endorsement of that view. Rating agency S&P Global updated its credit assessment of the United States on Aug. 18, citing new tariff revenue as a modest positive in America's otherwise shaky fiscal situation. S&P called new tariff revenue "robust" and said it has the potential to offset other actions likely to worsen the US debt profile. If that helps stabilize US debt relative to the size of the economy at current levels, the US economy might be fine. The US debt picture is still ugly. Total federal debt recently surpassed $37 trillion. The portion traded by investors in financial markets is equal to about 100% of GDP, an unprecedented level outside of wartime. The tax-cut legislation Trump signed into law in early July will add at least $4 trillion more to the national debt during the next decade. At current levels, Trump's tariffs could bring in nearly $300 billion per year in new revenue. That would cut the expected annual deficit in 2025 from $1.9 trillion to $1.6 trillion. That's not a huge improvement, but Trump's tariff revenue is still the most substantial new source of federal revenue in years. Read more: What Trump's tariffs mean for the economy and your wallet It's also notable that one of the rating agencies has anything positive to say about America's finances, which have been steadily deteriorating since 2001, the last time there was a budget surplus. S&P shocked financial markets in 2011 when it downgraded US creditworthiness from AAA to AA+, the first such downgrade ever. Two other rating agencies, Moody's and Fitch, have also knocked the US out of the top tier since then. S&P rates 11 countries higher than the US, including Canada, Australia, Singapore, and eight European nations. The US still has unique advantages. S&P notes that the US economy has grown far faster than other advanced economies since the COVID downturn in 2020. Reasons for US outperformance include "strong civic society, political respect for property rights and the rule of law, and success in promoting innovation and new technology." The primacy of the US dollar, which accounts for about 60% of the world's government reserves, is a priceless edge. Without saying so outright, the S&P analysis includes some stern warnings for Trump. The agency repeatedly cited the Federal Reserve as a unique enabler of stability and prosperity and noted that any interference with that could have dire consequences. America's AA+ rating "could come under pressure if political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence of the Federal Reserve," S&P said. The agency has cited US political dysfunction as a concern before, but the heavy emphasis on Federal Reserve independence is new. Read more: How much control does the president have over the Fed and interest rates?That seems an obvious reference to Trump's efforts to browbeat the Fed into sharply cutting interest rates and otherwise gain more control over Fed policymaking. Unlike any other president, Trump has repeatedly berated Fed Chair Jerome Powell and threatened to fire him. Powell and the Fed have so far resisted Trump's pressure campaign, but that could change over time as Powell and other Fed policymakers serve out their terms and Trump nominates replacements. S&P also referred to the importance of "transparent and timely statistical information" to the dynamism of the US economy. That sounds like an oblique reference to Trump's recent firing of the economist overseeing the jobs report after it showed a startling slowdown in hiring. Trump falsely claimed the data was "rigged" and nominated a partisan replacement who suggested suspending the monthly jobs report. S&P is indicating it would view such a move as credit-negative. The Trump tariffs remain a risk in themselves. S&P foresees relatively weak GDP growth of 1.7% this year and 1.6% in 2026, down from 2.8% in 2024. That slowdown comes in large part from the added cost and uncertainty of Trump's tariffs, plus a slowdown in labor force growth due to Trump's strict immigration policies. Most forecasters agree that Trump's policies will bring slower growth, with fewer jobs and perhaps higher inflation. The blessing for Trump and for most Americans is that the US economy is a dynamo that's hard to repress, even with questionable policies. Trump and most other presidents credit themselves for a resilient economy that would do just fine without them, and maybe perform even better. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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Commentary: There's an upside to the Trump tariffs

Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal

Commentary: There's an upside to the Trump tariffs

One of the largest daycare franchises opens Central Jersey location

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Commentary: There's an upside to the Trump tariffs

Dr. Phil's Distribution Partner Sues for Fraud, Breach of Contract Over $500 Million, 10-Year Deal

Commentary: There's an upside to the Trump tariffs

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